THIS
MEMORANDUM TAKES ACCOUNT OF RECOMMENDATIONS MADE BY THE SENATE
FOREIGN AFFAIRS, DEFENCE AND TRADE LEGISLATION COMMITTEE REPORT
TABLED ON 3 MARCH 2011

AUTONOMOUS
SANCTIONS BILL 2010

General
Outline

The Autonomous Sanctions Bill (the Bill) provides a
framework for the implementation in Australia of autonomous
sanctions.

Autonomous sanctions are punitive measures not involving
the use of armed force which a government imposes as a matter of
foreign policy - as opposed to an international obligation under a
United Nations Security Council decision - in situations of
international concern. Such situations include the grave
repression of the human rights or democratic freedoms of a
population by a government, or the proliferation of weapons of mass
destruction (WMD) or their means of delivery, or internal or
international armed conflict.

Autonomous sanctions measures are intended to achieve three
objectives:

(a) to limit the
adverse consequences of the situation of international concern (for
example, by denying access to military or paramilitary goods, or to
goods, technologies or funding that are enabling the pursuit of
programs of proliferation concern);

(b) to seek to
influence those responsible for giving rise to the situation of
international concern to modify their behaviour to remove the
concern (by motivating them to adopt different policies);
and

(c) to penalise
those responsible (for example, by denying access to international
travel or to the international financial system).

They are highly targeted measures, applied only to the
specific governments, individuals or entities (in the form of
targeted financial sanctions and travel bans), or to the specific
goods and services (such as military goods or goods with a WMD dual
use), that are responsible for, or have a nexus to, the situation
of international concern. They are applied so as to minimise,
to the extent possible, the impact on the general populations of
the affected countries.

Such measures - either supplementary to, or
independent of, United Nations Security Council sanctions -
are likely to play an increasing part in responses of like-minded
countries to situations of international concern.

Australia has actively applied autonomous sanctions as a
foreign policy tool for a number of years, relying on existing
instruments, intended for other purposes. To achieve more
effectively the objectives underlying imposing autonomous
sanctions, including the need to participate in concerted
international action involving other, like-minded countries, the
types of measures Australia would wish to implement are likely to
go beyond the scope of these instruments.

The purpose of the Bill is to strengthen Australia’s
autonomous sanctions regime by allowing greater flexibility in the
range of measures Australia can implement, thus ensuring
Australia’s autonomous sanctions match the scope and extent
of measures implemented by like-minded countries. The Bill
will also assist the administration of, and compliance with,
sanctions measures by removing distinctions between the scope and
extent of autonomous sanctions and UN sanction enforcement
laws.

The Bill is modelled on the legislation with which
Australia implements United Nations Security Council sanctions, the
Charter of the United Nations Act 1945 . It is intended
to be a framework under which regulations are made, with each set
of regulations containing the specific measures to be imposed in
response to a particular situation of international
concern.

By providing for autonomous sanctions measures to be
applied by regulation, rather than under the Bill itself, the Bill
will allow the necessary flexibility for the Government to respond
to international developments in a timely way. It will also
enable the Government to harmonise the administration of autonomous
sanctions and UN sanction enforcement laws, and simplify compliance
arrangements for those entities whose business requires a regular
and active engagement with the operation of such laws.

This
clause provides that the main purposes of the Bill (once enacted)
are to provide for autonomous sanctions; and their enforcement; and
to facilitate the collection, flow and use of information relevant
to the administration of autonomous sanctions.

Clause 4
Definitions

This
clause defines the following terms as used in the Bill (once
enacted): “asset”; “Australia”;
“autonomous sanction”; “CEO of a Commonwealth
entity”; “Commonwealth entity”; “designated
Commonwealth entity”; “foreign government
entity”; “officer of a Commonwealth entity”;
“public international organisation”; “sanction
law”; “State or Territory entity”;
“superior court”.

This
clause provides that the Minister for Foreign Affairs may by
legislative instrument specify a Commonwealth entity as a
designated Commonwealth entity.

A
designated Commonwealth entity is an entity involved in the
administration of sanctions laws. Designation of an entity
under the Bill (once enacted) confers on the CEO of that entity
certain powers provided for in Part 4 of the Bill in relation to
obtaining and sharing information for a purposes related to the
administration of sanctions laws.

Clause 6
Specifying a provision as a sanction law

This
clause provides that the Minister may by legislative instrument
specify a provision of a law of the Commonwealth (including in
relation to particular circumstances) as a sanction law for a
purpose stated in clause 3.

Once a law
is specified as a “sanction law”, the provisions of
Parts 3 (offences relating to sanctions) and 4 (information
relating to sanctions) of the Bill (once enacted) will apply to
that law.

Clause 7
Extension to external Territories

This
clause provides that the Bill (once enacted) extend to every external
Territory.

Clause 8
Act binds the Crown

This
clause provides that the Bill (once enacted) binds the
Crown in each of its
capacities, but does not make the Crown liable to be prosecuted for
an offence.

Clause 9
Relationship with other laws

This
clause provides that the Bill (once enacted) does not limit the
operation of other laws of the Commonwealth so far as they operate
to provide for autonomous sanctions or operate in relation to
autonomous sanctions.

This
clause provides that regulations made under the Bill (once enacted)
may make provision relating, amongst other things, to proscription
of persons or entities; restriction or prevention of uses of,
dealings with, and making available of, assets; as well as
restriction or prevention of the supply, sale, transfer or
procurement of goods or services. Before the
Governor-General makes such regulations, the Minister for
Foreign Affairs must be satisfied that the proposed regulations
will facilitate the conduct of Australia’s relations with
other countries or with entities or persons outside Australia or
will otherwise deal with matters, things or relationships outside
Australia.Despite subsection 14(2) of the Legislative
Instruments Act 2003 , regulations made under the Bill (once
enacted) may make provision in relation to a matter by applying,
adopting or incorporating any matter contained in an instrument or
other writi ng as in
force or existing from time to time.

The
purpose of subclause 10(3) is to enable the regulations to
incorporate decisions of public international and national
institutions, through publicly available documents, relevant to the
administration and enforcement of Australian autonomous
sanctions.

Examples
of types of ‘other writing’ that could be incorporated
by reference in regulations under subclause 10(3) include documents
listing goods of particular sensitivity in the context of the
proliferation of weapons of mass destruction, as prepared by
international export control regimes in which Australia is an
active participant, such as the Nuclear Suppliers Group, the
Missile Technology Control Regime, the Australia Group or the
Wassenaar Arrangement. The ‘reference’ would in all
cases be to documents publicly and readily available on the
Internet.

Clause 10
allows the Government the necessary flexibility to apply new, or
amend existing, autonomous sanctions measures in response to
international developments, which can change rapidly. Such
flexibility and responsiveness would not be possible if the
specific measures were to be implemented under the Bill
itself.

Clause 11
Regulations may have extraterritorial effect

This
clause provides that the regulations may have extraterritorial
effect.

Clause 12
Effect of regulations on earlier Commonwealth Acts and on State and
Territory laws

Clause 12
provides that the regulations have effect despite an Act enacted
before the commencement of this clause; or an instrument made under
such an Act (including such an instrument made at or after that
commencement); or a law of a State or Territory; or an instrument
made under such a law.

This
clause ensures that the fact that autonomous sanctions measures are
applied under regulations (for the reasons set out in relation to
clause 10 above) will not prevent them having effect if
pre-existing Commonwealth, State or Territory legislation or
legislative instruments would otherwise conflict with those
measures.

Clause 12
substantially corresponds to section 9 of the Charter of the
United Nations Act 1945 , which was introduced by an amendment
to that Act in 1993 and further amended in 2001.

The
decision to impose sanctions is properly one for the Executive as a
matter of foreign policy, with the Parliament setting the framework
and parameters for how such measures will be reflected in
Australian law. The measures applied are highly targeted, applied
only to specific foreign governments, individuals and entities or
to specific goods and services where there is a nexus to situations
of international concern.

It is
appropriate that measures applied with the intention of limiting
the adverse consequences of a situation of international concern
should not be prevented from taking effect as intended and should
not be affected by pre-existing legislation of legislative
instruments of the Commonwealth or a State or Territory.

Clause 13
Later Acts not to be interpreted as overriding this Part or the
regulations

This
clause provides that an Act enacted at or after the commencement of
this clause is not to be interpreted as amending or repealing, or
otherwise altering the effect or operation of, a provision of Part
2 of the Bill (once enacted) or of the regulations, or authorising
the making of an instrument that does so, unless that Act provides
expressly that it, or an instrument made under it, has effect
despite the Bill (once enacted), despite the regulations, or
despite a specified provision of the Bill (once enacted) or of the
regulations.

Clause 13
substantially corresponds to section 10 of the Charter of the
United Nations Act 1945 , introduced by amendment in 1993.
Sub-clause 13(2) preserves Parliament’s authority to enact
legislation which either directly amends, repeals, or otherwise
alters the effect or operation of, a provision of Part 2 of the
Bill or of regulations made under clause 10, or which authorises
the making of an instrument that does so. Therefore, the provision
does not derogate from any power of the Parliament. The only
limitation is that such legislation should expressly provide that
that is its purpose.

Given the
significance of the Bill and the regulations in the context of
seeking to deal with situations of international concern, including
prevention of nuclear proliferation, it is appropriate that
substantive changes to the Bill (once enacted) or regulations made
under it be done deliberately and expressly, rather than through
inadvertent or implied inconsistencies in future legislation or
regulations.

Division 2—Enforcing
the regulations

Division 2
of Part 2 provides for measures relating to the enforcement of
regulations made under clause 10. The measures in Division 2 of
Part 2 are to be distinguished from measures in the Bill providing
for the enforcement of autonomous sanctions, as referred to in
paragraph 3(b) of the Bill. The measures to which paragraph 3(b)
apply, relate to all laws specified by the Minister as
‘sanction laws’ under clause 6, and not merely those
found in regulations made under clause 10. Enforcement of
‘sanctions laws’, within the meaning of paragraph 3(b),
is governed by Parts 3 and 4 of the Bill.

This
clause provides for a superior court, on application by the
Attorney-General, to grant an injunction restraining a person
from engaging in conduct involving a contravention of the
regulations.

Subclause
14(5) provides that a court is not to require the Attorney-General
or anyone else to give an undertaking as to damages, as a condition
of granting an interim injunction.

The
purpose for which the Attorney-General might seek an injunction
under the Bill is to seek to prevent the contravention of a
sanctions law, which would be a criminal offence. It is not
appropriate, as a matter of policy, to require an undertaking as to
damages in an injunction which seeks to prevent the commission of a
criminal offence.

It is an
established principle of law that liability shall not accrue with
respect to a lawfully made decision of a Minister. Subclause
14(5) is consistent with this principle.

Clause 15
Invalidation of authorisations

This
clause provides that an authorisation (however described) granted
under the regulations is taken never to have been granted if
information contained in, or information or a document
accompanying, the application for the authorisation is false or
misleading in a material particular; or omits any matter or thing
without which the information or document is misleading in a
material particular.

Clause 16
provides that it is an offence to contravene a sanction law, or an
authorisation (however described) under a sanction law. When
committed by an individual, the offence is punishable on conviction
by a maximum 10 years’ imprisonment, and / or a maximum fine
the greater of 3 times the value of the relevant transaction or
transactions (if this can be calculated) or 2,500 penalty
units. When committed by a body corporate, it is an offence
of strict liability. The offence does not, however, apply to
a body corporate if it proves that it took reasonable precautions,
and exercised due diligence, to avoid contravening the sanction law
or authorisation concerned. The offence for a body corporate
is punishable on conviction by a maximum fine the greater of 3
times the value of the relevant transaction or transactions (if
this can be calculated) or 10,000 penalty units.

This
clause ensures that the consequences for contravening
Australia’s autonomous sanctions are identical to a
contravention of Australian laws implementing United Nations
Security Council sanctions. As the object and purpose of the
Bill is to ensure identical consequences for a contravention of
Australian laws implementing both autonomous and UNSC sanctions,
the Bill must necessarily replicate the offence provisions of the
Charter of the United Nations Act 1945 .

The origin
of the strict liability offence for bodies corporate in the
Charter of the United Nations Act 1945 is Recommendation 2
of the report, dated 24 November 2006, of the Inquiry into certain
Australian companies in relation to the UN Oil-for-Food Programme
conducted by Commissioner the Honourable Terence RH Cole AO RFD QC
(the Cole Inquiry). Commissioner Cole proposed that there be
new strict liability criminal offences with severe penalties -
three times the value of the offending transactions, by way of
monetary fine for corporations - for acting contrary to Australian
law implementing UNSC sanctions to ensure both that the penalties
have a sufficient deterrent effect for bodies corporate.

The strict
liability offence provisions for bodies corporate are balanced by
an absolute defence for bodies corporate that can prove they took
reasonable precautions, and exercised due diligence, to avoid
contravening the sanction law or authorisation concerned. This in
turn is intended to promote a culture of corporate
compliance.

The
penalties are appropriately severe given the context in which the
sanctions laws will operate. The sanctions laws will restrict
the trade in a narrow class of goods and services, such as military
and security goods and services to specific regimes and financial
transactions involving designated members or supporters of those
regimes, that the Australian Government assesses are facilitating
the repression of populations or the commission of regionally or
internationally destabilising acts (including the acquisition or
proliferation of weapons of mass destruction). Contravening
such restrictions is thus directly comparable to the contravention
of a UN sanction enforcement law under the Charter of the United
Nations Act 1945 and it is therefore appropriate that such
conduct be subject to the same consequences.

This
clause provides that it is an offence to give information or a
document which is false or misleading in a material particular to a
Commonwealth entity in connection with the administration of a
sanction law, or to another person reckless as to whether that
information or document will be given to a Commonwealth entity in
connection with the administration of a sanction law. The
penalty upon conviction is imprisonment for 10 years, 2,500 penalty
units or both. Section 15.1 of the Criminal Code
(extended geographical jurisdiction—category A) applies to
such offences.

This
clause ensures, for the same reasons set out in relation to clause
16, that the consequences for providing false and misleading
information in relation to the administration of sanctions laws are
identical to providing false or misleading information in relation
to the administration of UN sanction enforcement laws under the
Charter of the United Nations Act 1945.

Clause 18
provides that the CEO of a Commonwealth entity may, at the request
of a CEO of a designated Commonwealth entity, give that CEO
specified information or documents for a purpose directly related
to the administration of a sanction law, despite any other law of
the Commonwealth, a State or a Territory.

This
clause provides that the CEO of a designated Commonwealth entity
may, for the purpose of determining whether a sanction law has been
or is being complied with, give a person a written notice requiring
the person to give the CEO information or documents of the kind, by
the time and in any manner or form, specified in the notice. The
person must comply with the notice despite any other law of the
Commonwealth, a State or a Territory. This clause does not apply to
obtaining information or documents from the Commonwealth or a
Commonwealth entity.

Clause 20
Information may be required to be given on oath

This
clause provides that the notice referred to in clause 19 may
require the information to be verified by, or given on, oath or
affirmation.

Clause 21
Offence for failure to comply with requirement

Clause 21
provides that it is an offence not to comply with a notice given
under clause 19, punishable upon conviction by imprisonment for 12
months. Section 15.1 of the Criminal Code (extended
geographical jurisdiction—category A) applies to this
offence.

Clause 22
Self-incrimination not an excuse

This
clause provides that an individual is not excused from giving
information or a document under clause 19 on the ground that the
information, or the giving of the document, might tend to
incriminate the
individual or otherwise expose the individual to a penalty or other
liability. However, because of this, neither the information
given nor the giving of the document is admissible in evidence
against the individual in any criminal proceedings, or in any
proceedings that would expose the individual to a penalty, other
than proceedings for an offence against clause 17 (false or
misleading information given in connection with a sanction law) or
clause 21 (failure to comply with requirement to give information
or document).

Clause 22
of the Bill corresponds to section 33 the Charter of the United
Nations Act 1945 , introduced by amendment in 2007. Section 33
is one of a number of measures which implemented Recommendation 3
of the Cole Inquiry. Given the correspondence between autonomous
and UNSC sanctions, it is appropriate that the same authority
exists to enable sanctions enforcement agencies to monitor
compliance with both UNSC and autonomous sanctions.

Clause 23
CEO may copy documents

This
clause provides that the CEO of a designated Commonwealth entity
may take and keep a copy of a document given by a person under
clause 19, but must return the document to the person within a
reasonable time.

Clause 24
Further disclosure and use of information and
documents

This
clause provides that an officer of a designated Commonwealth entity
may, for a purpose connected with the administration of a sanction
law, copy, make a record of or use any information or document and
disclose any information, or give any document, to another officer
of that entity.

A CEO of a
designated Commonwealth entity may, for a purpose connected with
the administration of a sanction law, disclose any information or
give any document to a Minister of the Commonwealth, a State or a
Territory, or the CEO of another Commonwealth entity, or a State or
Territory entity, or a foreign government entity, or a public
international organisation, or a person or entity specified by the
Minister for Foreign Affairs in an instrument under this clause.
The CEO may only do so if he or she is satisfied that the recipient
of the disclosure will not disclose the information to anyone else
without the CEO’s consent.

This
clause applies despite a law of the Commonwealth (other than this
clause) and a law of a State or a Territory.

Clause 24
correspond to paragraph 35(2)(f) and subsection 35(3) of the
Charter of the United Nations Act 1945 , introduced by
amendment in 2007.

The
inclusion of the category of a person or entity specified by the
Minister provides a limited degree of additional flexibility in the
categories of persons or entities with whom information or
documents can be shared. This helps to ensure that
enforcement of sanction laws is not stymied through the incapacity
to exchange information with relevant persons or
entities.

Specification
by legislative instrument, a disallowable instrument, subjects the
specification to Parliamentary scrutiny.

Clause 25
Protection from liability

Clause 25
provides that a person who, in good faith, gives, discloses,
copies, makes a record of or uses information or a document under
clauses 18, 19, 23 or 24 is not liable to any proceedings for
contravening any other law because of that conduct or to civil
proceedings for loss, damage or injury of any kind suffered by
another person or entity because of that conduct. This does not
prevent the person from being liable to a proceeding for conduct of
the person that is revealed by the information or
document.

Clause 25
corresponds to section 36 of the Charter of the United Nations
Act 1945 , introduced by amendment in 2007. The purpose of the
immunity in clause 25 is to protect individuals who act in
accordance with the provisions in clauses 18, 19, 23 and 24.

Clause 26
Retention of records and documents

This
clause provides that a person who applies for an authorisation
under a sanction law must retain any records or documents relating
to that application for a period of 5 years from the day on which
the application was made (if the authorisation was not granted) or
the last day on which an action to which the authorisation relates
was done (if the authorisation was granted). Similarly, a
person who is granted an authorisation under a sanction law must
retain any records or documents relating to the person’s
compliance with any conditions to which the authorisation is
subject for the period of 5 years beginning on the last day on
which an action to which the authorisation relates was
done.

Clause 27
Delegation

This
clause provides that the CEO of a Commonwealth entity may by
written instrument delegate all or any of his or her powers or
functions under Part 4 of the Bill (once enacted) to an employee at
the SES or equivalent level. In exercising powers or performing
functions delegated under this clause, the delegate must comply
with any directions of the CEO.

“SES
employee” is defined for the purpose of Commonwealth law in
section 17AA of the Acts Interpretation Act 1901 .

Part
5—Miscellaneous

Clause 28
Regulations

This
clause provides that the Governor-General may make
regulations prescribing matters required or permitted by the Bill
(once enacted) to be prescribed, or necessary or convenient to be
prescribed for carrying out or giving effect to the Bill (once
enacted).